Pfizer walks away from AstraZeneca offer - for now

A month after launching its bid to acquire AstraZeneca, Pfizer has pulled the plug on its £69.4 billion offer for the Anglo-Swedish drugmaker, at least for the timebeing.

A few hours before the deadline was reached for a deal to be sealed under UK takeover laws, Pfizer confirmed that following the AstraZeneca board's rejection of its proposal, it did not intend to make an offer. Chief executive Ian Read said "we continue to believe that our final proposal was compelling and represented full value for AstraZeneca based on the information that was available to us".

He added that "the pursuit of this transaction was a potential enhancement to our existing strategy. We will continue our focus on the execution of our plans, bringing forth new treatments to meet patients’ needs and remaining responsible stewards of our shareholders’ capital".

AstraZeneca is clearly pleased and chairman Leif Johansson said that "we welcome the opportunity to continue building on the momentum we have already demonstrated as an independent company". He added that "we have attractive growth prospects and a rapidly progressing pipeline. In the coming months, we anticipate positive news flow across our core therapeutic areas, which underpins our confidence in the long-term prospects of the business".

Pfizer's attempts to buy AstraZeneca have been met with considerable opposition in the UK, not least among trade unions. The largest union, Unite, a vocal critic of Pfizer, noted that under Takeover Panel rules, talks could be reignited in three months if AstraZeneca invites its rival back to the negotiating table. Failing that, Pfizer can legally make a new hostile bid from November.

'No room for complacency' - Unite

Tony Burke Unite assistant general secretary said that “Pfizer failed to convince hardly anyone that their bid was good for science and would secure skilled jobs and manufacturing in the UK". However, he added that "there can be no room for complacency though".

The last couple of weeks have seen a number of AstraZeneca's key shareholders back the management's desire for independence but many have also expressed their disquiet about the board's lack of engagement. Mr Burke added that "we expect that there will be renewed pressure on shareholders over the coming months with the likelihood that Pfizer could be back".

He urged the UK government to use this time "to intervene and put a public interest test in place for proposed takeovers of this size, just as other governments do, such as the French". Mr Burke concluded by saying "the future of vital life sciences in the UK and improvements in health are so much more important than the desire of one company to minimise its tax liabilities and wrangles over drug patents".